Malta Extending The EU Single Market Influence Beyond EU

Papilio Services Limited


Papilio Services Limited, established in 2012, is based in Malta with sister companies in the Netherlands and the Czech Republic. The firm boasts a multinational team and a diverse client base, providing cross-border solutions in Corporate, Tax Compliance, and Residency services on a global scale.
Malta has been a member of the European Union (EU) since 2004. Its relationship with the EU was officially established in December 1970 when it signed an Association Agreement, which called...
European Union Strategy
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Malta has been a member of the European Union (EU) since 2004. Its relationship with the EU was officially established in December 1970 when it signed an Association Agreement, which called for the creation of a customs union based on free trade between Malta and the European Economic Community (EEC). Since then, Malta has been actively involved in the EU, even assuming the rotating Presidency of the Council of the European Union in 2017.

The Letta Report and the EU Single Market

The Letta Report, authored by former Italian Prime Minister Enrico Letta, provides a comprehensive analysis of the future of the EU Single Market. The report, titled "Much more than a market: Speed, Security, Solidarity," aims to significantly upgrade the EU Single Market and discusses the project of the Capital Market Union, which aims to harmonise the flow of capital within the bloc. The sixth chapter of the Letta Report, "The Single Market beyond its borders," delves into how the Single Market interacts with global markets and political landscapes, and how it can extend the EU's influence internationally, emphasising the urgency of supporting European businesses to compete globally and advocates for streamlined regulations and consistent enforcement.

Malta and the Single Market Beyond its Borders

In line with the Letta Report's vision, Malta plays a significant role in extending the influence of the Single Market beyond the EU's borders. Malta's unique position and its relationships with countries outside of Europe have been leveraged to promote the Single Market's principles of free trade and harmonised regulations.

Malta holds a unique position as a bridge of European interests with those of other global powers, such as the Middle East, the Commonwealth, and Small Island Developing States (SIDS), due to the island's geopolitical posture, which is characterised by neutrality and strategic regional positioning.

Malta has a special connection to both developed and developing countries on many continents as a member of the Commonwealth. With this role, Malta is better equipped to act as a liaison between Commonwealth nations that are not part of the EU and encourage communication on issues like environmental sustainability, economic development, and educational exchanges. By strengthening the Single Market's outreach to these nations, Malta's membership in the Commonwealth not only improves its international relations but also fosters cooperative ties that are advantageous for trade, security, and cross-cultural exchange.

As an island itself, Malta has demonstrated its commitment to establish itself as a pioneer in pushing policies that cater to the particular needs of island states through its support of Small Island Developing States (SIDS) in international fora. Global sustainability agendas need to be advanced, and this leadership is essential to combining them with the Single Market's overarching objectives and making sure that economic and environmental policies are inclusive and worldwide focused.

Situated at the intersection of Europe, Africa, and the Middle East, Malta is a Mediterranean island. For the EU's external commercial and diplomatic ties, particularly with nations in North Africa and the Middle East, this geographic positioning is significant. With respect to trade agreements, migration negotiations, and energy cooperation, especially with regard to renewable energy sources and oil and gas exploration, Malta can take advantage of its regional status. These exchanges support regional stability and prosperity in addition to enhancing the exterior aspects of the Single Market.

For instance, Malta's success in the Contract for Difference (CFD) market and its strides in digital transformation can serve as models for other countries. By sharing its experiences and best practices, Malta can help extend the Single Market's influence and foster collaboration and trade between the EU and other countries.

Large natural harbours and the advanced telecom sector also play a significant role in Malta's ability to influence the EU Single Market beyond its borders. These factors have helped Malta become a leading centre for container and freight transhipment, further extending the reach of the Single Market.

Digital Transformation

Malta has been a leader in the digital transformation within the EU. It ranks 5th out of the 28 EU Member States in the Digital Economy and Society Index (DESI) 2020, performing above the EU average in all five dimensions of the index. The country has made significant strides in broadband connectivity, internet use by citizens, the use of digital technology by businesses, and the provision of digital public services.

How to utilise Malta's extended influence?

Registering a company in Malta offers a practical, EU-based alternative with access to the EU Single Market, and Malta's extended influence beyond its borders. Papilio Services' area of expertise is offering customised corporate services and packages to small, medium, and large enterprises. The country operates a unique imputation system, where business owners can benefit from a refundable tax credit and effectively reduce their tax rate. Additionally, Malta has an extensive network of double taxation treaties with over 80 countries, ensuring that businesses can avoid or minimise double taxation.

Future Outlook

Looking ahead, Malta's role in the EU and its influence on the EU Single Market will likely continue to evolve. The country's unique position, its economic landscape, and its digital transformation efforts all play a part in shaping this influence. As Malta Company Registration agents, our team of experts will assist you through the whole process of incorporating a business or company in Malta. Contact us for a consultation to discuss your business requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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